Startup Rates for Women Entrepreneurs dropped by 15%

Startup rates for women dropped by 15% from 2019 to 2020, and held constant in 2021

Women also experienced sharper declines than men in their intentions to start a business within three years and overall startup rates in 2020, but not in upper-middle income countries.

These are the findings published today in the Global Entrepreneurship Monitor (GEM) 2021/2022 Women’s Entrepreneurship Report.

These report findings are based on a trend analysis of women’s entrepreneurship across 50 countries and shed light on the actions policymakers can take to support female entrepreneurs. The report highlights the gender composition of startups, pandemic impacts on male and female entrepreneurs and structural and environmental inequalities that need to be addressed on a policy level.

“GEM is the only global research source that collects data on entrepreneurship directly from the source – entrepreneurs,” said GEM Executive Director Aileen Ionescu-Somers. “Women represent two out of every five early-stage entrepreneurs,” added Amanda Elam, lead author of the report and a research fellow at the Diana International Research Institute at Babson College, a founding organization and global sponsor of GEM.

Other key findings from the report include:

    • Globally, women represent about one in three high-growth entrepreneurs and one in three innovation entrepreneurs focused on national and international markets. 

    • Women in upper-middle income countries represent some of the most innovative, high-growth entrepreneurs in the world, at parity with men for international market focus. 

    • Business exit rates for women rose from 2.9% to 3.6% over the two-year pandemic period, in contrast to the higher rates for men (3.5% to 4.4%). Women in upper-middle income countries showed the largest pandemic impact on business exit with a 74% increase from 2019 to 2021, compared to 34% for men.

    • Almost half of women entrepreneurs surveyed worldwide are involved in the Wholesale/Retail sector and one in five women entrepreneurs in the Government and Social Services sector (18.5% women versus 10.1% men). However, only 2.7% of women compared to 4.7% of men are starting businesses in Information, Computers, and Technology (ICT), the sector that draws the majority of venture capital dollars worldwide.

    • In every country surveyed, women were much less active in business than men and tended to make much smaller related investments. The most significant gender differences were found in lower-income countries, while women in upper-middle-income countries were closest to gender parity. 

    • National experts generally rated the enabling environment for women entrepreneurs very poorly in most countries. This may explain why women have a slightly lower perception of entrepreneurship as a career choice compared to men. Countries with the highest expert ratings also saw the highest levels of entrepreneurial intentions. 

What can be done to address the barriers to business startup and growth for women entrepreneurs:

    1. Women entrepreneurs are underrepresented in traditionally male-dominated sectors. To counter this, policymakers can provide support to women entrepreneurs equally in all sectors and countries, especially in male-dominated sectors where negative stereotypes are triggered. 

    1. Women represent 1 in 3 high potential entrepreneurs, so policy programming is needed to mobilize financing and other support toward the sectors where women are currently active. 

    1. As academic research suggests that women are just as likely as men to succeed when starting similar businesses in comparable industry sectors, structural barriers can be more directly addressed to debunk negative stereotypes about women entrepreneurs. 

    1. National Experts taking part in the research agree that there is currently little cultural support for female entrepreneurs. It is important to celebrate and promote successful women founders as role models.

Download the report

This article has been simplified from the original article published by GEM.

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